US authorities may impose duties on France for digital tax

The US
administration has begun to study the implications of France’s decision to
develop its own legislation governing the taxation of American digital giants,
as well as considering possible responses from Washington. This is stated in a
statement released on Wednesday by the representative of the United States at
the trade negotiations, Robert Lightheiser.

“The
United States is extremely concerned that the digital services tax, which is
expected to be approved tomorrow by the French Senate, is unjustly directed
against American companies,” he said. “The president instructed us to
study the consequences of the introduction of such a law and determine whether
it is discriminatory or unjustified and, thus, complicates and restricts US
trade,” the US representative said. Lightheiser also stressed that US law
gives him “the authority to investigate unfair trade practices on the part
of a foreign country and take retaliatory measures.”

Earlier,
the business news agency Bloomberg, citing two sources, reported that the US
administration, following a study of the effects of France’s decision on
American companies such as Amazon, Apple, Facebook and Google, may impose
additional duties on French goods and services. Countermeasures may be similar
to those taken by the United States against Chinese companies accused of
stealing American intellectual property.

According to
the agency’s publication, Republican Congressman Charles Grassley, chairman of
the Senate Legal Committee of the US Congress, and senior Democrat Ron Wyden of
this committee, last month sent a letter to US Treasury Secretary Stephen
Mnuchin asking to convince Paris to refrain from imposing an additional tax on
the American digital giants. Senators recommended using for this “all
available legislative means”, including doubling the tax rate of French
citizens and companies in the United States.
It is believed that with respect to Amazon,
Apple, Facebook, Google and other digital corporations, taxation should be
based on the countries in which they receive the main profit, and not from
where their head offices are located. The most active supporters of the introduction
of such a digital tax are France and the United Kingdom, which have already
begun to work out their own legislation to this effect. At the same time,
French Finance Minister Bruno Le Mayor, who participated in the two-day meeting
of finance ministers and heads of central banks of the G20 in Fukuoka, Japan,
in June, allowed Paris to reject such an idea if unified international rules
were adopted.